Lahore, November 05, 2018 (PPI-OT): Pakistan’s Polyethylene Terephthalate (PET) packaging sector mostly derives its demand from bottled water and carbonated beverage industry, while, pharmaceutical and edible oil sectors have become an upcoming demand driver. To cater to this demand, introduction of different PET bottles sizes have become important drivers for the sector’s growth. Strong consumer demand for beverages and other products that use PET packaging remains pivotal to the overall packaging industry’s growth.
The industry primarily operates in two segments: PET Preforms and PET Bottles. PET Preform segment is experiencing volumetric growth. Whereas, PET Bottle segment enjoys better margins. The beverage companies in the last few years have installed bottle manufacturing units themselves limiting the growth in bottles segment for the vendors and at the same time creating a strong demand for Preforms from the vendor industry.
The ratings reflect the Company’s established position in PET Preform and PET Bottle segments. EcoPack has experienced a rising top-line owing to significant demand growth in PET Preform segment and its increased share in revenues. Strong competition in PET Bottles market has led to modest growth in the Bottles business. However, this has led to an overall decline in margins percentage, as PET Preforms is relatively a lower margin and high volume segment. The Company’s overall leveraging has increased but coverages remain comfortable. Sound working capital management lend support to financial profile.
The ratings are dependent upon the Company’s ability to continue on it’s growth momentum while improving its margins and capacity utilization. Deterioration in margins and/or coverages will have a negative impact on ratings.
For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
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